Posted: September 13th, 2017
Paper, Order, or Assignment Requirements
Coursework Assignment Brief
Semester: | Autumn 2014 | |
Module Code: | PM305 | |
Module Title: | International Marketing | |
Programme | BSc (Honours) | |
Level: | Level 6 | |
Awarding Body: | University of Plymouth | |
Module Leader | Liz Larner PM305 | |
Format: | International Marketing report | |
Any special requirements: | All work should be submitted on the Student Portal along with a Turnitin Report | |
Word Limit: | 2,500 (excludes appendices) Work in excess of word count will not be marked | |
Deadline date for submission: | Monday 15th December 2014, submissions close at midnight
Submissions via Turnitin on the portal. |
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Learning outcomes to be examined in this assessment |
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Percentage of marks awarded for module:
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This assignment is worth 50% of the total marks for the module | |
Assessment criteria | Explanatory comments on the assessment criteria | Maximum marks for each section |
Research and situation analysis |
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30% |
Constructive analysis and application of international marketing strategies |
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60% |
Format and referencing, | Harvard referencing where relevant and appropriate. Appropriate report format | 10% |
Total | 100
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Candidates must clearly label their ID Number on additional separate reference, formula or answer sheets.
Summative Assignment Task:
This summative assessment represents 50% of grade.
All learning outcomes will be assessed.
Scenario
As a marketing consultant for new Moxy budget hotel chain, you have been asked to complete a strategic marketing audit to analyse both internal and external factors that are impacting on the organisations ability to develop internationally.
You have been given a particular remit to consider the changing nature of the global tourist industry to consider the future international market development for Moxy. Based on your critical analysis of the international hotel industry, assess the strategic options available to Moxy to develop its international presence. Recommend with justification Moxy’s strategy for international market development.
International Marketing Strategy Report
This should include:
Notes on report:
Supporting Case Study Material: Moxy
What we’ve seen
Ikea in the UK
Ikea opened its first UK store in 1987 and currently operates 19 stores, 18 of which are located in the UK and one in Ireland. Future openings coming on stream include new stores at Reading and Sheffield.
Flat market conditions have depressed sales of furniture in the UK for several years. Also, the company has not been able to open any new stores since 2008. This has meant almost static levels of sales for Ikea.
Budget hotels in the UK
Mintel’s report Hotels – UK – October 2013 reports that the market for hotels is growing in the UK. In 2013 there were 160.2 million guesthouse nights in the UK, +14.4% on 2008. By 2018 this will grow by 11.7% to reach 178.9 million.
Budget hotels account for around 14% of the market by number of hotels and 23% of the market by number of rooms. The leading groups in the market are the budget chains Premier Inn and Travelodge. These companies have a combined market share of 10% of UK hotels and 15% of UK hotel rooms.
During 2012 UK hotel supply increased by around 18,000 rooms, the highest increase over the past decade. Around 90% of new rooms in 2012 were branded. And the explosion in hotel development is continuing – around 3,300 new rooms opened in the UK by the end of 2013 and a further 15,000 will come on stream in 2014. Over half of all new rooms being built are expected to be in budget hotels.
Will Ikea’s new hotels contain Ikea furniture?
Marriott International launched its new economy tier, three-star hotel brand Moxy into Europe in March 2013, expected to arrive in the UK during 2014/15. Moxy, designed in conjunction with furniture company IKEA, is targeted specifically at what Marriott sees as a key emerging demographic, the ‘Millennial traveller’ (those born between the early 1980s and the early 2000s).
The first Moxy hotel will open near Milan’s Malpensa airport in 2015, with rooms priced at €60 (£52) to €80 a night. And Ikea is targeting further locations in cities across the UK and Europe. In the UK the first four sites will begin opening in 2015 at Westfield’s Stratford City Olympics site, Heathrow’s Bath Road (a 422 bed hotel), the Royal Docks in east London, and Liverpool’s Cropper Street.
The furnishings in guests’ rooms will not come from Ikea, though they will reflect the no-frills price of a night’s stay. But the hotels will be built with an ‘Ikea’ approach including pre-manufactured rooms complete with flat-pack fittings, manufactured in Italy and delivered across Europe. The bathroom amenities are reported to be ‘upscale’ and the colour tones planned for the hotel rooms will not feature the bright colours which are associated with some Ikea furnishings, but will be calming, neutral and have a natural theme such as leather-look and stone.
So Ikea’s motivation is not so much to create a showroom for the company’s home furnishing lines, but to capitalise on its skills in delivering excellent value for money. The company brings its property development skills to the party, along with a desire to make money outside of its core markets.
Opportunities for cross-marketing?
Ikea is not the first furniture retailer to open hotels in the UK. Laura Ashley opened its first hotel in August 2013. The Manor Hotel at Elstree is showcasing Laura Ashley furnishings. Guests sleep on the company’s beds, read by Laura Ashley lamps and enjoy the comforts of Laura Ashley furniture throughout the hotel. The interior also uses archive designs, some dating back to the 1950s. And Laura Ashley’s design team have a track record of working on interior design for other hotels before this.
So it would seem surprising if Ikea misses an opportunity to expose customers at Moxy hotels to its design ideas, its textiles and its housewares. Where else will people get the chance to actually sleep on an Ikea bed for the night, or experience an Ikea bathroom? And there could also be other cross marketing opportunities such as developing a loyalty scheme for customers of the hotels to benefit from the stores, and customers of the stores to use the hotels.
Extending brands
The Mintel Inspire Trend, Extend My Brand, looks at the ways established brands have begun to leverage their trust by extending into new categories. Brands in declining or heavily regulated markets are also extending into new territories and new sectors to survive, whilst others are using extension as a form of self-promotion in its own right. And for Moxy, any visitor from outside the UK there is scope for the brand to capitalise on people’s familiarity with the Ikea brand, setting the expectation of hotel standards. There could be scope for the brand to become involved in facilitating trips, including shopping trips that take in a UK Ikea store!
What it means
The competition in the UK: low=frills, high teach
As the budget sector continues to grow apace, leading hotel chains are rolling out new pod brands, designed around a combination of small space (ideally suited to congested city centre locations), few frills, low prices but high technology.
In July 2013 the UK budget market leader Premier Inn announced its new ‘hub by Premier Inn’ brand. Rooms will feature an en-suite bathroom, wardrobe, desk, bed and a 40” smart screen television, contained within a space of 11.4 square metres.
Guests will be able to control lighting and room temperature using a mobile phone app. They will also be able to pre-order breakfast and change the television channel so their favourite programme is on when they arrive. According to owners Whitbread, room rates will be up to 30% cheaper than existing Premier Inn hotels.
citizenM has launched its first London venue with two more properties to follow in the capital in 2014. The boutique capsule concept is designed around ‘affordable luxury’ with rooms offering a king-size bed, wall-to-wall window and a screen MoodPad that enables guests to control the television, window blinds, temperature, coloured lighting and wake-up alarm themes. Wi-Fi and iMac computers are offered free of charge along with the services of a 24-hour snack/drinks bar canteenM. The brand describes its target market as ‘frequent traveller, value conscious, multi-cultural, free-spirited, tech savvy, informed, social, international, contemporary and urban’.
Source: Mintel Report 226.3.14 |
Additional Moxy Case Study Data:
Total spending on travel and tourism is projected to have risen by over 40% in real terms (all amounts stated in 2011 US Dollars) between 2012 and 2020. Growth in leisure travel spending is forecasted to slightly outpace that of business travel spending, which supports the move of some major hotel chains to create all-inclusive resorts, as detailed below in this report.
FIGURE 1: Projected spending on leisure & business travel, 2012-20
(in 2011 US$m)
World | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | % change 2012-20 |
Leisure travel spending | 3,222.1 | 3,324.1 | 3,479.7 | 3,652.7 | 3,823.2 | 3,999.8 | 4,184.6 | 4,375.2 | 4,570.5 | +41.8 |
Business travel spending | 1,017.4 | 1,048.9 | 1,103.5 | 1,161.1 | 1,214.2 | 1,266.2 | 1,318.0 | 1,369.7 | 1,418.8 | +39.4 |
Total | 4,177.8 | 4,309.9 | 4,518.0 | 4,746.3 | 4,967.8 | 5,193.9 | 5,427.8 | 5,667.4 | 5,909.1 | +41.3 |
Source: WTTC
Otherwise, spending on domestic travel is expected to grow faster than incoming receipts. This is mainly due to the rapid growth of travel (both leisure and business) spending in the large developing countries – notably the BRICS (Brazil, Russia, India, China and South Africa), where tourism is overwhelmingly domestic.
FIGURE 2: Projected incoming receipts & domestic travel spending, 2012-20
(in 2011 US$m)
World | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | % change 2012-20 |
Incoming receipts | 1,243.0 | 1,282.0 | 1,343.7 | 1,409.8 | 1,466.6 | 1,525.1 | 1,587.2 | 1,650.1 | 1,714.7 | +38.0 |
Domestic travel spending | 2,934.8 | 3,027.9 | 3,174.2 | 3,336.5 | 3,501.2 | 3,668.8 | 3,840.6 | 4,017.3 | 4,194.4 | +42.9 |
Source: WTTC
According to Mintel estimates, the total number of hotels in 20 major country markets worldwide should have advanced by about 20% between 2011 and 2016. Unsurprisingly, the greatest growth is projected for developing countries – the BRICs in particular – led by India, China and South Africa. Two South East Asian nations – Indonesia and Vietnam – are also slated for rapid growth, with the number of hotels projected to have risen by over 40% by 2016. Meanwhile, the drop in the total number of hotels forecasted for Australia and Japan does not necessarily imply a reduction in total accommodation capacity, but rather an increase in the average size of property. In Japan, for instance, small traditional inns – called ryokans – are being progressively replaced by larger standard hotels.
FIGURE 3: Trend in the number of hotels in 20 leading country markets worldwide, 2011-16
Region | 2011 | 2012 (est) | 2013 (fore) | 2014 (fore) | 2015 (fore) | 2016 (fore) | % growth 2011-16 |
Australia | 5,990 | 5,957 | 5,902 | 5,840 | 5,772 | 5,700 | -4.8 |
Brazil | 27,250 | 27,686 | 28,164 | 29,019 | 30,153 | 31,207 | +14.5 |
Canada | 8,486 | 8,569 | 8,575 | 8,631 | 8,650 | 8,693 | +2.4 |
China | 80,776 | 87,276 | 97,339 | 107,933 | 120,100 | 128,505 | +59.1 |
Colombia | 7,572 | 7,970 | 8,346 | 8,725 | 9,106 | 9,494 | +25.4 |
France | 58,500 | 59,100 | 60,400 | 61,600 | 62,900 | 64,200 | +9.7 |
Germany | 45,600 | 46,203 | 46,698 | 47,434 | 48,160 | 48,881 | +7.2 |
India | 52,640 | 58,860 | 64,940 | 72,650 | 80,620 | 89,630 | +70.3 |
Indonesia | 15,283 | 16,551 | 17,636 | 18,954 | 20,398 | 21,881 | +43.2 |
Italy | 77,350 | 77,650 | 78,340 | 80,110 | 82,510 | 85,430 | +10.4 |
Japan | 79,066 | 77,727 | 76,196 | 74,566 | 72,932 | 71,302 | -9.8 |
Mexico | 17,294 | 17,975 | 18,470 | 19,072 | 19,646 | 20,278 | +17.3 |
Russia | 5,655 | 5,956 | 6,254 | 6,540 | 6,787 | 7,045 | +24.6 |
South Africa | 5,320 | 5,668 | 6,054 | 6,427 | 6,863 | 7,355 | +38.3 |
South Korea | 711 | 726 | 749 | 773 | 795 | 818 | +15.0 |
Spain | 35,114 | 36,031 | 36,907 | 37,401 | 38,143 | 39,231 | +11.7 |
Turkey | 12,721 | 12,635 | 12,655 | 12,943 | 13,281 | 13,629 | +7.1 |
UK | 46,388 | 46,348 | 46,625 | 46,932 | 47,762 | 48,285 | +4.1 |
US | 51,210 | 51,700 | 52,100 | 52,500 | 52,800 | 53,200 | +3.9 |
Vietnam | 13,000 | 13,706 | 14,677 | 15,718 | 16,986 | 18,296 | +40.7 |
Total | 645,926 | 664,294 | 687,027 | 713,768 | 744,364 | 773,060 | +19.7 |
Note: est = estimate; fore = forecast
Source: Mintel Travel Accommodation – 2013
Trend Information
Source: Mintel Hotel Trends– 2014
Ikea Store Location
As of August 2014, IKEA owns and operates more than 350 stores, in some markets it operates franchise arrangements.
Country | Debut | No. of stores |
Australia | 1975 | 7 |
Austria | 1977 | 7 |
Belgium | 1984 | 6 |
Bulgaria | 2011 | 1 |
Canada | 1975 | 12 |
China | 1998 | 15 |
Croatia | 2014 | 1 |
Cyprus | 2007 | 1 |
Czechoslovakia (to 1992) Czech Republic (1993 on) |
1991 | 5 |
Denmark | 1969 | 5 |
Dominican Republic | 2010 | 3 |
Egypt | 2013 | 1 |
Estonia | TBA | 0 |
Finland | 1996 | 5 |
France | 1981 | 30 |
Germany | 1974 | 46 |
Greece | 2001 | 5 |
Hong Kong (to 1997) Hong Kong (1997 on) |
1975 | 3 |
Hungary | 1990 | 2 |
Iceland | 1981 | 1 |
India | TBA | 0 |
Indonesia | 2014 | 0 |
Israel | 2001 | 3 |
Italy | 1989 | 21 |
Japan | 1974 – 1986 (initial), 2006 (reentry) |
5 |
Jordan | 2014 | 1 |
Kuwait | 1984 | 1 |
Latvia | TBA | 0 |
Lithuania | 2013 | 1 |
Malaysia | 1996 | 1 |
Morocco | TBA | 0 |
Netherlands | 1978 | 12 |
Norway | 1963 | 6 |
Poland | 1991 | 8 |
Portugal | 2004 | 3 |
Puerto Rico | 2013 | 3 |
Qatar | 2013 | 1 |
Ireland | 2009 | 1 |
Romania | 2007 | 1 |
Russia | 2000 | 14 |
Saudi Arabia | 1983 | 3 |
Singapore | 1978 | 2 |
Slovakia | 1992 | 1 |
South Korea | 2014 | 0 |
Spain | 1980 | 20 |
Sweden | 1958 | 19 |
Switzerland | 1973 | 7 |
Taiwan | 1994 | 5 |
Thailand | 2011 | 1 |
Turkey | 2005 | 5 |
Ukraine | TBA | 0 |
United Arab Emirates | 1991 | 2 |
United Kingdom | 1987 | 18 |
United States | 1985 | 38 |
Source: Ikea.com
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